Birmingham has topped the league of local authorities which failed to collect all its council tax, with £12 million left outstanding, according to new figures.

Local authorities in England failed to collect more than £580 million in council taxes in the 2003-04 financial year, according to figures compiled by the GMB union.

Other areas which failed to collect the most council tax included the London borough of Hackney (£11.4 million uncollected), Liverpool (£9.6 million) and Manchester (£9.4 million).

Coventry was 18th on the list, with just under £5.5 million uncollected.

The Isles of Scilly had the least amounts of uncollected council tax at just £19,000.

Paul Kenny, senior official of the GMB said: "If the councils could collect this money they could fund repair of council houses, build more affordable housing and improve services.

"Local councils need to examine what changes are needed in the council tax collection regime to ensure that they are able to collect this money.

"For example does the law and the tax system need to be changed to make landlords liable for the tax levied on their properties? Local authority workers in the front line will want to see councils do more to improve collection."